Substantive Procedures for Trade Receivables Flashcards
Obtain a breakdown…
Obtain a breakdown of receivables listing, cast and agree the total to trial balance/receivables ledger control account
Obtain prior year aged receivables…
Obtain prior-year aged receivables listing and for significant customers compare to current year and prior year balances. DIscuss with management any missing receivables
Select a sample of trade receivables….
Select a sample of trade receivables from listing and prepare a receivables circulisation
Review after date cash receipts…
Review after date cash receipts and follow through to pre-year-end receivable balances
Inspect aged receivables report…
Inspect aged receivables report to identify any slow moving balances, discuss these with credit control manager to assess whether an allowance or write down is necessary
Slow moving/aged balances…
For any slow moving/aged balances review customer correspondence to assess whether there are any invoices in dispute
Review board minutes…
Review board minutes/discuss with management to assess whether there are any significant concerns regarding recoverability of receivables
Select a sample of goods dispatched notes…
Select a sample of goods dispatched notes from before the year end, agree to sales invoices and to inclusion in year-end receivables ledger
Review receivables ledger…
Review the receivables ledger for any credit balances and discuss with management whether these should be reclassified as payables
Review customer correspondence…
Review custoemr correspondence to identify any balances which are in dispute or unlikely to be paid and discuss with management
Recalculate the allowance…
Recalculate the allowance for trade receivables and compare any potential irrecoverable balances to assess if the allowance is adequate
